Wexford Beef & Lamb Unlimited Company, the name given to the Fane Valley-ABP joint venture that owns Slaney, Irish Country Meats (ICM) and A Lonhienne in Belgium, published a €3.431m operating profit for the period ending 27 September 2020.
This was achieved on sales of €357.9m, delivering an operating profit margin of just under 1%.
It compares with an operating loss of €1.290m the previous year on sales of €322.6m.
The turnaround in the Republic of Ireland and Belgian side of the ABP-Fane Valley partnership puts it on par with the Northern Ireland and UK part of the business, Linden Foods. It recorded an operating profit of £2.15m (€2.53m) for the year ending September 2020 on sales of £208.96m (€245.83m), leaving an operating margin of just over 1%.
The current financial year will be the last one in the joint venture that came into being in 2015 when ABP bought the Allen family’s share of the Slaney and ICM business, followed by the acquisition of 50% of the Linden business from Fane Valley, the Northern Ireland-headquartered farmers’ co-op.
In May 2021, it was announced that ABP would acquire the Fane Valley share of the joint venture.
This has been cleared by the competition authorities and is expected to take effect from October this year.
As was widely predicted when the joint venture was originally announced, it proved to be a stepping stone for ABP to acquire the Slaney beef business and ICM lamb business including the Belgian side of that business.
The Irish Farmers Journal estimates that following this ABP now has an annual cattle kill of 500,000, around 28% of the national kill in the Republic of Ireland.
In Northern Ireland (NI), the ABP Lurgan, Newry and Linden Foods factories account for an estimated 40% of the NI cattle kill.
Prior to the joint venture with Fane Valley, the only ABP sheep interest on the island of Ireland was the Lurgan factory.
The Irish Farmers Journal estimates that the acquisition of Linden now gives ABP control of 60% of all sheep slaughtered in NI, while acquiring ICM moves ABP from having no sheep presence at all in the Republic of Ireland to handling an estimated 1.25m sheep annually.
With ABP soon to take complete control, it will be interesting to see if the Slaney and ICM identity is retained or will they just be subsumed into the ABP group.
The takeover of three significant businesses poses the question, can similar companies survive in the longer term or will it be necessary to be part of a larger group?
There is also a question around the larger groups – could they be a target for one of the global players like JBS, which recently bought Kerry’s meats and meals business.
As the ending of the Fane Valley-ABP joint venture shows, the corporate world doesn’t stand still.